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- Title
Role of Pre-Money Valuation Determinants of Indian Startups in Fundraising and Predicting Unicorns.
- Authors
Barick, Gaurav; Aithal, P. S.
- Abstract
The study intends to analyze the role of pre-money valuation determinants in the valuation of startups and in predicting unicorns. Secondary data was collected from Indian startups of different sizes--decacorns, unicorns, early-stage startups, minicorns and soonicorns. The initial sample consisted of 3,342 completed deals between 2010 and 2022. In addition, 9 independent variables representing firm characteristics and funding determinants were considered, with pre-money valuation as the dependent variable. Multiple regression and binary logistic regression were applied to predict the value of 9 determinants and compare the pre-money valuation of the two groups, unicorns/decacorns with early-stage/minicorn/soonicorn, respectively. The results from multiple regression highlighted that the variables such as total funding raised to date, funding type/series, annual revenue, funding round, latest funded amount, and stake acquired have a significant impact on the pre-money valuation of Indian startups. The results of binary logistic regression also highlighted that the unicorn/decacorn group had raised higher total funding in a short period than the other group.
- Publication
IUP Journal of Applied Economics, 2023, Vol 22, Issue 1, p54
- ISSN
0972-6861
- Publication type
Academic Journal